NZ Herald: Sir Michael Fay says his group's bid for the Crafar farms remains on the table despite being rejected by the receivers yesterday.
The group's $171.5 million offer is almost $30 million short of that from China's Pengxin International Group.
KordaMentha receiver Brendon Gibson said the accepted Pengxin offer was by far the best offer and remained so.
Regarding Fay's offer, he said: "It was conditional and a collaboration of several companies and was a price that we think was unacceptable, so no go on any of those fronts.
"The price is a very key factor. That's our job to get the very best price and we've got an offer that we were happy with and remain happy."
Here's my answers to some of the FAQs:
We need the investment
No, the asset is already there - there is no net investment. It would be different if they were buying a swamp and turning it into a dairy farm, but they aren't they are taking over a going concern. They are not taking risk they are not adding any value above that which a domestic buyer would, they will be extracting value back to China.
The Fay group bid is too low, the Chinese are offering the market price
No, despite Michael Fay's brutal business acumen and his links to previous governments which enabled him to buy up state assets on the cheap, leverage them to the max and then flog them off, the Fay consortium's bid is the realistic market price - it is the Chinese bid that is above the market price because they are willing to pay above the odds for a strategic chunk of the country's productive farmland. If you define whatever the highest price is available in the world as the market value then it will be the Chinese. The Chinese interests will always be willing to pay a $30m premium on any offer. If Fay and his mates offered $250m the Chinese would offer $280m.
The workers and managers will all be NZers anyway.
No, they will import their own people for these roles. Under the so-called "free trade agreement" NZ signed with China they are allowed to import categories of workers for Chinese purposes already. Anyone who thinks they won't extend this to farm workers and managers is naive.
So, that's a no then. The Chinese - and any other foreign group in this situation - are not investing they are taking over. Is it any wonder the Chinese Vice-Premier Hui Liangyu will fly in at this point.